Pakistan is still largely a cash-based, informal economy. The majority of transactions are conducted in cash, except for those that are very large and require a bank draft or pay order. Several studies suggest that up to 60 percent of the economy is informal, with the majority of local companies, particularly SMEs, undocumented and outside the tax net. 

A number of government departments have started to offer services via the Internet. In the private sector, four Pakistani airlines now offer e-ticketing, and almost all local banks offer online banking services. This segment of the economy is growing steadily as there are approximately 50 million Internet subscribers in Pakistan, and this figure is expected to double during the next five years. According to local trade reporting, Pakistan is the 46th largest market for e-commerce with a revenue of US$5.4 billion in 2024.

There are also more than 45 million Facebook users in Pakistan, and several local companies now use social media to promote their products and services. As per Pakistan Telecommunication Authority (PTA), the number of 3G and 4G users in Pakistan reached 198 million in 2024, and mobile banking is an area with some promise.

Current Market Trends

The e-commerce sector has focused mainly on consumer products. Online customers in Pakistan search for and purchase consumer electronics and mobile phones, employment queries, online education and counseling, sale/purchase and information gathering about vehicles, computers and accessories, financial services, laptops and notebooks, motor vehicles by brand, test preparation and tutoring, food, apparel and accessories. Consumer choices and the records they generate also produce a trove of data.

eCommerce Services

There are no banned browsers in Pakistan. Google Chrome is the most popular browser with 56 percent of total visitors, followed by Microsoft Internet Explorer with 21 percent. The remaining 23 percent of searches are through Android, Safari, Opera, Opera Mini, UC Browser, Safari and Maxthon, respectively. Google Chrome, MS Edge, and Android account for the longest session durations.

Popular eCommerce Sites

Some leading eCommerce websites in Pakistan are.

 •    OLX
•    daraz
•    PakWheels
•    Zameen
•    Shophive
•    Homeshopping
 

Online Payment

According to industry jreports, 95 percent of e-companies get payments for their online orders by cash-on-delivery. This increases the liquidity requirements for e-commerce companies and also forces them to have dedicated teams that manage cash receipts for the company, thereby raising operational costs. The larger players in the e-commerce space have started to utilize digital payments, and are optimistic that the industry will come together to coax consumers into moving away from cash-on-delivery to online payments. Digital payments also represent a hurdle for Pakistan’s e-commerce sector. While a number of products like EasyPaisa, JazzCash, and uPaisa – which are mobile banks - are available today, none of them has high market penetration. This, coupled with the fact that only 24 percent of the country’s population has a bank account, vastly raises the cost of doing business for e-commerce companies.

Mobile eCommerce

With the introduction of 4G services, internet penetration has risen rapidly. Internet subscriber growth in Pakistan is averaging over 35 percent per year, and total subscribers crossed the 118.8 million mark. Cheap smartphones, low cost of 3G/4G services, and a consumer-goods obsessed middle class have meant that Pakistan’s e-commerce sector is “mobile first,” with some e-commerce start-ups claiming that over 75 percent of their total business is online.

Major Buying Holidays

E-commerce entrepreneurs enjoy heavy traffic on Pakistani holidays and event seasons such as Eid-ul-Fitr (March-April), Eid-ul-Adha (July), Black Friday, New Year, and Wedding Season (October through April). Major sporting events can also drive purchases of related equipment and apparel.  

Social Media

The introduction of mobile broadband, coupled with affordable smartphones, has driven the social media use and the popularity of Facebook, X, Skype, and Instagram. Facebook leads social media with more than three billion connections per day and more than 45 million user accounts in Pakistan. X is also fast becoming the preferred social media portal with more than 280 million connections per day. Google, YouTube, and Instagram are also popular.

Trade Promotion and Advertising

Over a dozen major advertising agencies operate in Pakistan, some with foreign affiliation. Advertising agency commissions are usually 15 percent of the cost of the advertisement. By U.S. standards, these agencies are fairly small concerns, with annual billings of less than $20 million each. Television and newspapers are the most widely used modes of advertising. Others include radio, billboards, periodicals and trade journals, direct response advertising, slides and commercial film shorts in movie theaters, short messages (SMS) through cellular phones, as well as internet-based social media. 

Pakistan has over 700 daily newspapers and weekly, biweekly, and monthly magazines. The daily Jang, published in Urdu, is the largest newspaper, with a claimed national circulation of almost 900,000. Combined circulation for the roughly 11 English-language newspapers is approximately 300,000. The principal English-language daily newspapers are Dawn (published in Karachi, Lahore, and Islamabad), The News (Islamabad, Lahore, and Karachi), The Nation (Lahore and Islamabad), Daily Times, Express Tribune, and The Business Recorder (Karachi). Although the English-language press reaches only a small fraction of the population, it is influential in political, business, academic, and professional circles. 

The Profit by Pakistan Today, published from Lahore, is a well-known go-to source of business, economic and finnacial news. Several special interest magazines, such as Spider (Internet), Computerworld (Computer and IT), Mobile Communications, and Flare are steadily gaining prominence. Almost all newspapers in Pakistan are now available on the Internet. Television is broadcast on state-owned Pakistan Television and several other local channels, using the PAL system. English language programs, including news, are available on several satellite channels. 

Cable and Satellite Television: Cable television has been available in Pakistan for more than ten years and channels continue to become more professional and organized. Broadcast media is regulated by the Pakistan Electronic Media Regulatory Authority (PEMRA), which has issued 106 licences for the establishment and operation of Satellite TV Channels, 257 licences for FM Radio Stations, 4,062 for Cable TV Service, and 61 in other categories  It is estimated that cable television reaches approximately 30 percent of households in Pakistan. Regulatory details about broadcast media are available on the PEMRA website

Satellite television broadcasts have made rapid inroads in Pakistan, and it is estimated that more than 500,000 mediums to high frequency dish antennas are presently installed in the country, although, with the advent of cable TV, the popularity of direct satellite television is gradually diminishing. More than 100 channels are received via satellite. The most popular transponder received in Pakistan is “Asiasat”. 

Radio Pakistan, funded by the government, reaches audiences within the country and abroad in 36 languages (19 regional and 17 foreign) from 24 medium and short-wave stations and more than 25 FM stations. The FM license granted by the government does not permit them to broadcast exclusive news and current affairs programs. 

Pakistan currently allows trade-advertising material other than commercial catalogs to enter duty-free but levies a 15 percent sales tax on those items. Samples may be admitted duty-free only if they are representative parts of a complete shipment or are unsuitable for sale. The duties applicable to commercial shipments apply to samples having a commercial value. 

Trade Shows: The textile and apparel, leather, and gemstones industries hold regular trade shows. Recently, the telecommunications, safety and security, higher education, information technology and oil and gas industries have become active in this area. Trade and seminar missions can also provide valuable first-hand insights into the Pakistani market, as well as serving to introduce U.S. equipment and technology. Trade missions can educate government and other end-users about product availability, technical characteristics, quality, and price, and can establish contacts with key organizations to promote product awareness. Presently, the trade show business in Pakistan is suffering tremendously from the security situation, with the U.S. State Department Travel Advisory recommending that U.S. citizens reconsider travel to Pakistan.

U.S. firms should also consider participation in regional events (focusing on either South Asia or the Middle East) in order to reach potential Pakistani purchasers, agents, and distributors.  

Pricing

Product pricing is often difficult for new entrants to the Pakistan market, principally due to the country’s complex tax structure. Foreign companies represented by a local agent, distributor, licensee, or other intermediary generally work closely with their local affiliates in determining prices.

Relatively high shelf prices frequently include a substantial tax component, which can add nearly 40-45 percent to the retailer’s purchase price. High prices and taxes for imported consumer items have created a large market for goods coming into Pakistan through “informal channels.” Expatriate Pakistanis and professional couriers bring in large quantities of goods from the Middle East Gulf region in their personal baggage. Goods are also frequently smuggled from Dubai via sea, misrepresented as destined for the Afghan market to avoid import tariffs, or undervalued on bills of lading to evade taxes. In some segments of the market, goods brought through these channels have market shares ranging from 50 to 95 percent.

As an illustration of the scale and complexity of the various taxes and duties imposed on imported consumer items, marketers of products build into their final sales price the following factors: landing charges (approximately 1.0 percent of initial price); customs duty; sales tax; bank charges; insurance, provincial revenue tax (if applicable), and the general sales tax.

Pricing of non-consumer items is based on different parameters. Most foreign companies in this market segment are also represented by agent/distributors and give their local affiliates significant latitude in pricing decisions. Agents often opt for higher sales turnover by reducing their margins, allowing them to generate more revenue through a higher volume of sales. In other cases, local agent/distributors may add up to 30 percent to the list price as their commission, depending on the nature of the product. For duty and tariff purposes, they quote the principal’s list prices only. On average, retailer’s markup imported machinery and equipment by 10 to 15 percent and imported general merchandise 20 to 30 percent.